Islamic megabank likely based in Bahrain -Al Baraka CEO

A long-touted $3 billion Islamic megabank is more likely to be established in Bahrain although a final decision has not yet been made, the chief executive of Al Baraka Bank, who also serves as an advisor for the project, told Reuters on Tuesday.

capital to compete with the Islamic units of Western banks on mandates to syndicate loans, arrange Islamic bonds and supply project finance in the Gulf Arab region.

The lack of a lender of last resort is seen as one of the nearly $1 trillion industry’s greatest weaknesses, as few central banks issue liquidity instruments compliant with Islamic law, forcing Islamic banks to place their liquidity with large conventional banks. (Reporting by Shaheen Pasha and Asma Al Sharif in Jeddah, Editing by Dinesh Nair)